Customer service as a competitive advantage

A company’s competitive advantages are typically their price points or product offerings, but another aspect of the business that has the ability to get a company a significant competitive boost is customer service.

Customer service is generally considered reactive - a customer reaches out because they need help or have questions. Great customer service has the potential to convince your existing customers to stay and even refer their family and friends, expanding your customer base.

These days, there are so many choices to choose from that customers often suffer from decision fatigue. To differentiate yourself from competitors, you have gain customers’ loyalties and turn them into advocates of your brand.

There are typically three types of loyalty; a combination of all three will produce strong loyalties to your brand:

1. Behavioral loyalty

The customer is loyal primarily out of convenience (i.e. proximity or price).

2. Rational loyalty

The customer is loyal as long as the brand provides the most value (i.e. loyalty programs, discounts).

3. Emotional loyalty

The customer is loyal because of a preference or attachment to the brand (i.e. the brand resonates with the customer’s own personal values or aspirations).

According to Robert Plutchik’s wheel of emotions, there are eight main positive/negative emotions that drive responses: sadness and joy, disgust and trust, anger and fear, as well as surprise and anticipation. Loyalty is more easily gained if you can invoke a positive emotion from your customer. According to CustomerThink, 74% of customers with positive emotions will become advocates, while 63% will remain customers.

Customer loyalty and brand advocacy are extremely important to a company.

Consumers are4x more likely to make a transactionwhen referred by someone they know, and there is also an 18% boost in loyalty from a referred customer versus those acquired through other methods.

Actively listen to your customers and use the feedback to improve processes

Don’t underestimate the value of excellent customer service - it all comes down to creating a memorable experience for your customers. Great customer service as a competitive advantage will increase loyalty, bring in new customers, increase revenue, and help you stand out from the pack.